The Inter-American Development Bank (IDB) has agreed to provide $280m funding to Ecuador to support transformation of its energy grid.

The funding helps to improve the country’s energy efficiency and promote the access of electricity generated from renewable sources.

The loan from the bank is expected to support Ecuador in its climate change goals in the energy sector and consolidate its fiscal and external accounts through policy reforms.

IDB said that the funding is one of a series of loans that aim to support change in the country’s energy grid.

The loan will improve efficiency, modernisation, and innovation in the supply of electricity

Project team director Virginia Snyder said: “Ecuador continues working to reduce its consumption of fossil fuels and has done so through reforms of its energy grid.

“Sectoral policies such as those that Ecuador has been implementing are essential for improving the performance of the electricity sector.

“The evidence is clear that reforms of sectoral policies can lead to an increase in investment and in quality of service by improving the efficiency of the electricity sector and its financial sustainability.”

According to IDB, Ecuador accounts for about 0.08% of the planet’s greenhouse gas emissions, which is comparatively less than other countries with similar features.

Ecuador has made a commitment to reduce 9% of its emissions by 2025.

The funding is also expected to support the efforts of the country to improve efficiency, modernisation, innovation and sustainability in the electricity supply and the exchange it with neighbouring countries.

In March last year, IDB granted $87.1m loan to improve continuity, operational management and reliability of the drinking water system and boost wastewater treatment capacity in Quito, the capital city of Ecuador.